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When working as a consultant in the telecommunications industry, Simon Schwall discovered “mobile money” – a technology that would take him across the world and eventually lead him to become an entrepreneur. This technology, which appeared in Africa around a decade ago, makes it possible to make payments via SMS without having internet access or even a bank account. It thus opens up new opportunities for financial transactions for those living in remote or less developed areas.

Satellite data: the key to crop insurance

Joining start-up company BIMA, Mr Schwall went to Papua New Guinea to launch a life and health insurance offering processed via mobile payments. The model was a success, but when severe drought hit the region, many people could neither pay their insurance nor basic necessities. “I realised that there was an enormous need for some kind of insurance for people who depend on agriculture for their livelihood. Crop insurance seemed to me to be the next obvious step.”

Mr Schwall quickly realised that the main stumbling block for setting up an affordable crop insurance model was the cost of verifying claims. His solution was to use satellite data, such as that made available for free by the European Space Agency’s earth observation programme Copernicus. “Satellite data makes it possible to evaluate whether a specific geographical area has been affected by a flood or drought due to weather conditions without having to go on site,” he explains. Combining such data, mobile payment technology and considerable knowledge of providing insurance to low income makers in developing countries, OKO Crop Assurance was born.

Fit 4 Start – ensuring the product-market fit

OKO was originally set up in Israel, but after about a year in existence, the company obtained a place in Luxembourg’s Fit 4 Start programme. “Fit 4 Start is strongly focused on making sure that your product really fits your customers’ needs,” says Mr Schwall. “Although we believed that we had a very good product, we realised that we still needed to make quite a few modifications to suit our clients. I learnt that you never know your customers well enough, and it is worth spending a lot of energy in the beginning to clarify how your solution can best fit their lifestyle and habits.” The seed funding from the programme was also a good help to fund pilots and prove the business model for crop insurance.

Fit 4 Start is strongly focused on making sure that your product really fits your customers’ needs.

The first official product launch took place in Mali in January 2020, and to date, over 1,000 farmers have subscribed. “Our offering is available to anyone who has a mobile phone. Potential clients can ask our call centre to contact them without having to use any phone credits, which is very helpful. We have also employed 17 sales representatives who go to cooperatives, farms and markets and explain how our insurance works.”

The company won the second prize at the Fintech Awards 2019, one of the main fintech competitions in Luxembourg, and has been included in the list of the Top European fintech startups to follow in 2020 by Sifted, the Financial Times start-up media.

International to the core

Today, OKO has staff in Israel, Mali and Luxembourg, which hosts the technical team. “There are many advantages of being in Luxembourg, in particular the attractive R&D incentives,” says Mr Schwall. “Luxembourg is also more welcoming to foreign workers than Israel. My CTO is from India, and it was a lot easier for him to get a visa in Luxembourg than in Israel.” Israel, on the other hand, offers a stimulating start-up environment, relatively low costs of living and a good visibility towards investors.

There are many advantages of being in Luxembourg, in particular the attractive R&D incentives.

The international set-up and its digital way of functioning has made it relatively easy for OKO to adapt to the working conditions imposed by COVID-19. “We have equipped our teams for working from home, and our solution is available over the phone as always. This is very important, as many NGOs running support programmes and financial initiatives can no longer make field visits and continue their work. In addition, much of their support is now reoriented towards the pandemic, while the need for improving farmers’ financial resilience remains huge.”

Making a difference

Together with its partners, telecommunications provider Orange and insurance company Allianz, OKO is now exploring new markets. The company is working on a pilot project in Uganda to provide crop insurance to the barley producers of a beer company. “Our offering is combined with their sustainability programme,” Mr Schwall points out. “We help them reach their sustainability goals, while making their farmers become more weather resilient and less financially vulnerable.”

We want to use our knowledge about technology and new business models to offer something that is really helpful to a large part of the world’s population.

The social pathos of the start-up is obvious. “We are a for-profit company, but we have a strong desire to make a positive impact,” Mr Schwall confirms. “We want to use our knowledge about technology and new business models to offer something that is really helpful to a large part of the world’s population.”

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